LELAND — One month into 2018, H2GO’s legal costs have ballooned to three times the amount budgeted for the whole year. Part of that cost has come from its attorney, Brian Edes, who has been acting as de facto spokesman for the utility – which has issued a gag order against its own communication staff.
That gag order was just one development in the tumultuous months since H2GO voted to dissolve itself and move its assets to Belville. The last-ditch maneuver was orchestrated in part by outgoing Commissioner Carl Antos, who lost his re-election bid, In an attempt to save plans for a $35 million reverse osmosis filtration plant. The move triggered a lawsuit by Leland; several motions are currently stuck in legal limbo.
Confused? Read this: H2GO: A timeline of how reverse osmosis broke up a public utility
Just days after the lawsuit was filed, H2GO’s public information officer, Tyler Wittkofsy – along with the rest of the utility’s staff – were barred from speaking with the public and the media on Dec. 7, when the utility retained Edes’ services for $20,000. Since then, Edes has been fielding questions – and billing H2G0 for his time.
“If Belville and the former commissioners had not pulled their little action in November, then none of these attorneys fees would be necessary.” — H2GO Commissioner Trudy Trombley
Mounting legal bills, but for what?
The utility’s annual legal budget of $76,000 has grown to $226,000 in just over a month – but it’s not clear what part of that increase has come from Edes’s services. Because of its standing gag order, H2GO has forwarded all questions about legal billing to Edes, but Edes called questions about his billing rates “inappropriate,” and declined to provide specific figures.
Port City Daily requested an “itemized document containing legal bills” and Edes supplied a listing of H2GO’s check register. As the name implies, the register records the total amount of checks signed by H2GO, but not specifics. They shed no light on how much Edes charges per hour, which services – like answering rate-payer or media questions – he bills for, or the total amount he has billed to date.
In an email on Wednesday, Feb.14, Edes responded to another request for specific and itemized legal bills, saying “I will provide a formal response on behalf of H2GO in the very near future.” Edes has not yet delivered that response, and so the situation remains unclear.
What is clear, however, is that Edes is a more expensive spokesman than Wittkofsky.
Based on Wittkofsky’s annual salary of $51,000, his hourly services run approximately $24.50 per hour.
According to the contract retaining the law firm of Crossley McIntosh & Collier, H2GO agreed to pay $200 per hour for services provided by Edes or another partner, $175 for an associate and $95 a paralegal. Thus, in the best case financial scenario where Edes delegates his work to a paralegal, his services still run the utility four times the cost of Wittkofsky.
In the worst case scenario, Edes’s work could cost the utility over eight times what it pays Wittkofsky – the spokesman who is still employed but has been barred from speaking.
Listen: H2GO board approves a $150,000 increase in legal fees. Audio has been edited for brevity.
What are legal fees costing rate-payers?
H2GO doesn’t receive any outside funding, but it does have other revenue streams, including tax refunds, fees from developers and builders, fire hydrant testing fees and a $55,000 per year contract with the Town of Leland.
Edes declined to elaborate on what percentage of the utility’s budget was supported by rate-payer costs or to provide any sense of what the average ratepayer’s share of the legal fees incurred by H2GO might be.
“It would be very difficult to accurately state how much each customer has contributed to legal fees incurred during this fiscal year for a myriad of reasons. Simply dividing the amount of legal fees budged by the number of customers would not provide an answer to that question for the following reasons,” Edes said.
Edes added that complications – like the varying number of residents per household, and which services those households received – were responsible for the difficulty in predicting the cost to H2GO’s customers. Edes did confirm that “(a)ll customers contribute to the expenses of H2GO, including its legal fees.”
Commissioners weigh in
Despite rising legal costs, H2GO Commissioners Trudy Trombley and Jeff Gerken remain in favor of the gag order that has in part necessitated Edes’ services. Trombley cited the “previous actions” of the staff and the utility’s pre-election Board as reasoning to continue mandating the motion. Trombley also pointed out that the legal fees – resulting at least in part from the gag order – were necessitated by the attempt to turn H2GO over to Belville.
“If Belville and the former commissioners had not pulled their little action in November, then none of these attorneys fees would be necessary,” Trombley said.
Newcomer Rodney McCoy said he would be in favor of rescinding the motion if it were to appear on a future agenda.
“They got a right to speak up just as much as anybody,” McCoy said.
Commissioner Ron Jenkins echoed McCoy’s sentiment, specifically when it came to Wittofsky’s ability to do his job.
“Especially if it’s their job to answer the question, those individuals are hired to do a specific job and those individuals should be permitted to do their job,” Jenkins said.
Bill Beer, a newly elected commissioner whose swearing-in was contested, declined to weigh in either way on the gag order.
“I don’t know how much longer we’ll do that. I’m sure that’s something that will come up and we’ll have to vote on it,” Beer said.
Legal contract between H2Go and Crossley McIntosh & Collier by Johanna Ferebee on Scribd
Below: Documents provided by Brian Edes, attorney for H2GO Brunswick Regional Water and Sewer.
Non RO Project Legal Fees by Johanna Ferebee on Scribd
RO Project Legal Fees (1) by Johanna Ferebee on Scribd
Preliminary Injunction Order, December 2017 by Johanna Ferebee on Scribd
Johanna Ferebee can be reached at firstname.lastname@example.org or @j__ferebee on Twitter